To a question on whether house prices were in a bubble, she defined a bubble as an exorbitant unsustainable price increase. “Prices fall and do not go up. That’s a bubble. What we have is ‘overheating’ of prices, not a bubble,” Napic director Khuzaimah Abdullah(filepic) said.

PUTRAJAYA: The National Property Information Centre (Napic) sees another challenging year for the sector next year, with the outlook continuing “to soften” moving forward.

Completed-but-unsold residential units ballooned to RM12.26bil for the first half of this year from about RM8.56bil a year ago (2015: RM4.92bil).

Known as an “overhang”, total unsold completed units stood at 20,876 this year, compared with 14,792 at the end of last year, most of them high-rise residentials costing RM500,000 and above.

Ironically, Kedah had the highest number of overhang units totalling 4,363 priced between RM300,000 and RM400,000 in the Kuala Muda district.

The briefing was organised by the Valuation and Property Services Department of the Finance Ministry.

Johor and Selangor followed next with an overhang of 3,803 and 3,664 units, respectively.

In Johor, the unsold category comprised high-rise units, 28.4%, and two- and three-storey housing, 27.8%. Up to 76.8% of these unsold units were priced more than RM300,000.

In Selangor, 56.5% of the overhang comprised condominiums and apartments priced more than RM500,000.

Amid the slew of negative news for the property sector, there are some positives.

“The residential segment continues to drive the market and prices are holding (up),” Khuzaimah said.

The other positive is that housing starts stood at 68,000 in the middle of 2017, reflecting a rise of 16% compared with the same period a year ago. This signals “business confidence”, Khuzaimah said.

However, the bulk of these housing starts are stratified properties in Kuala Lumpur.

The value of total property transactions as at the first half of 2017 amounted to RM67.82bil, a rise of 5%, the first rise in two years, which is also viewed positively. Volume, however, continued to slide.

Khuzaimah said although the focus is mainly on affordable housing, for the first half of this year, new launches by private developers priced from RM400,000 and above made up about half of the new residential launches.

“Which is why we have public-sector agencies coming in to fill the gap,” she said.

On the “stubbornly high prices”, Khuzaimah said prices were moderating.

If one were to look at the Malaysian House Price Index, for the second quarter the annual change (in price) was 5.6%, which is “normal”.

“A double-digit growth (as seen in some quarters between 2011 and 2014) is not,” she said.

To a question on whether house prices were in a bubble, she defined a bubble as an exorbitant unsustainable price increase.

“Prices fall and do not go up. That’s a bubble. What we have is ‘overheating’ of prices, not a bubble,” she said.

On the office space segment, Khuzaimah said occupancy for the country was at 83.5%, with the Federal Territory occupancy rate at 81.4%, Penang 81.9% and Selangor, 74.7%.

Malaysia had office space totalling more than 169 million square feet, of which about 36 million sq ft were vacant, Napic said. About 47% of this unoccupied office space was in the Federal Territory.

“We hope the local authorities will be prudent in their planning,” she said.

For the retail space segment, the country had mall space totalling 162 million sq ft, of which about 30 million sq ft were vacant. Selangor had the highest percentage of mall space, followed by the Federal Territory, but vacant space was the highest in Penang, the Napic research showed.